Skip to main content

About this Show

Power Lunch

News/Business. Sue Herera, Tyler Mathisen. Today's news on the economy, markets, real estate, media and technology. New. (CC)

NETWORK

DURATION
01:00:00

RATING

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Virtual Ch. 58 (CNBC)

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
704

PIXEL HEIGHT
480

TOPIC FREQUENCY

Us 10, S&p 9, Washington 8, Tyler 7, Alan Simpson 6, Citibank 5, Steve Liesman 5, U.s. 5, John Harwood 4, Steve 4, Bob 3, John 3, Chevron 3, Erskine Bowles 3, John Mccain 2, Exxon 2, Toyota 2, Gary 2, San Diego 2, Bob Pisani 2,
Borrow a DVD
of this show
  CNBC    Power Lunch    News/Business. Sue Herera, Tyler Mathisen. Today's news on  
   the economy, markets, real estate, media and technology....  

    February 1, 2013
    1:00 - 2:00pm EST  

1:00pm
♪ [ male announcer ] introducing the all-new cadillac xts... another big night on the town, eh? ...and the return of life lived large. ♪ we don't let frequent heartburn come between us and what we love. so if you're one of them people who gets heartburn and then treats day after day... block the acid with prilosec otc and don't get heartburn in the first place! [ male announcer ] one pill each morning. 24 hours. zero heartburn.
1:01pm
pete, kick us off. >> derivatives of of financials going high. >> oracle. >> paccar long. >> teradnye. >> on sports biz, brian shackman. that's new orleans, the show airs at 7:00 p.m. tonight on nbc sports network. have a great weekend. enjoy the game. good afternoon, everybody. it has been five years plus some coming. dow breaking through, nipping above 14,000. it is managing to stay right in that range right now. so you keep riding the rally or is it time maybe to book some profits. take money off the table. we have a big cnbc exclusive this hour. that man with those two
1:02pm
gentlemen, john harwood live with co-founders of campaign to fix the debt. alan simpson and simpson-bowles, we will get the whole thing on spending cuts and more. now, down where it is all taking place today, down on the stock exchange, sue? >> the market is hitting a milestone. dow breaking the 14,000 mark for the first time since '07. er with up to 13,997.30. not to be left behind. s&p 500 hitting levels it hasn't seen since december of '07. up 5% in january of this year alone. its best start since 1997. now this rally, as you know, with the s&p now up 15 points or one full percent comes on the back of the latest jobs report and number of other positive data. steve liesman will have more on that in just a minute. but first, if the markets continue to push higher and we
1:03pm
hit new highs, the most important question will be whether or not at this point entering a long ---er with entering a long term multiyear bull market for stocks, like we saw in maybe the 1980s and also 2000. you have been talking to people about this, bob pisani, what are you hearing? >> it is a big debate. let me highlight what we need to do here. are we entering a new market like '80s or even 2009 to 2012. stocks have been doing well because the fed is keeping rates at zero. there is also nowhere else to put money right now. companies are doing okay on cost cutting issues as well. pe ratio, 13.5. not exorbitant. >> but that's not enough. not taking us to highs for several years. you need make an argument we should continue the rally for several more years. we need to see much more robust gdp growth and revenue growth which has become anemic. what gives us gdp and revenue growth? clarification from washington.
1:04pm
a grand bargain encompassing a deficit reduction for ten years like tax reform and titlement reform. discretionary titlement reform. and debt extension for maybe two years. first, the recession needs it stabilize there. but a clear road to fiscal, banking reforms and indication that europe is serious about improving competitiveness. third, resumption of growth in emerging economies led by china. finally, the fed successfully engineering a modest increase in interest rates without unleashing run away inflation. i know, tall orders. >> this is a tall order, bob. >> but this would create a huge boost of business confidence. capital expenditures and hiring would increase and revenues would rise. finally, sue, on a day when the dow passed 14,000, it is forth while noting that the last time the dow passed 14,000, valuations were much higher with the ratio for the s&p at that time was 22.
1:05pm
about 14 right now. what does that mean? well, historic average for the s&p 500 is 15, it means the market was way overvalued, sue, in 2007. today it is somewhat underval i'd. steve pointed this out to me. i think it a very good point. tip of the hat to you, steve. market overvalued then in 2007. not the same market. >> i'm exhausted listening to him. >> it is. somebody has it put the big picture in it and bob did that very nicely. how do you feel about the market at this point. >> it is almost ill logical because they are celebrating that the jobs report is good but not so good that the feds walk away. we are creating jobs but not enough to uncle benny will still sit there and everybody is getting what they want. that's a mistake. what you want is you want it see strong job creations so uncle benny can walk away. >> are you surprised at this rally? >> i am a little bit. >> this is tepid. >> i hear you and you know me, i've been cautious. so listen,er with struggling at 14,000. yeah we break through but now we
1:06pm
are on the other side of it again. south of it. feels like it is just tired at the moment. i'm not saying it is not going to go higher but it has to consolidate. >> but ism was strong too today, sue. >> ism is strong which is one of the things we point oud. data supportive to the move we saw at 14,000. but you are still cautious. >> i'm cautious because i think there has to be consolidation. doesn't mean the market will sell off to 15 or 20% but i look to the market to give back 5 to 8%. taking back 1475 just to test that level once again and make sure the buyers are there. >> there are plenty of buyers there. another point about today, the first day of the month. >> right. >> there are fund -- there is a real phenomenon, folks. this is not just something that we throw out. >> one thing i hear from hedge fund guys, which i told you earlier, a lot of them had a very difficult end of 2012 and really good january in 2013. i'm hearing some of them are taking money off the table because they are up 5, 8, 10%. they're done. >> they are either done or at
1:07pm
least they will wait until we get through march and these sequestering to see where that goes. are we going to get this grand plan that you talk about? what we need, but are we really going to get it. i think that's where you make headway. >> thanks, guys. appreciate it. that's some list, by the way. >> somebody has it pull it together here. >> little engine that could. >> as we move way up. >> you heard it here first. ty, over to you. >> sue, as is often the case, numbers tell the story today. economic numbers explain it all. steve liesman has been driving into it. what do you got? >> yeah, tyler, the mark set rallying today on relatively strong data. the story could be, that if jobs were this strong in the teeth of a fiscal cliff debate, they could be stronger. let me show what you joe is saying, an economist writing this morning. with manufacturing picking back up and consumer confidence rebounding it is hard to see what other than washington, could stop economic reforming.
1:08pm
>> ticking up, we will talk about that in a second, but the revisions of 127,to the prior two months, a big deal. manufacturing, ism beating expectations at 53. consumer sentiment beating kmek stations. take a look at how we revise the private sector now. old average for the fourth quarter, remember this is head of the fiscal cliff debate, 185. now with private sector creating jobs at 225,000 monthly pace. doug dunkin, economist of fannie mae writing, the healthy after wrath monthly gain in private pay rolls in the fourth quarter is consistent with robust growth in business investment the gdp report, suggesting that certainty -- with lofts slack in the work force no immediate danger of fed qe pull back but if we ratchet up job creation then purchase coon story for the second half of the year. >> steve liesman, thank you very
1:09pm
much. >> you know, smart money, what do they say about the rally? cnbc has rare and exclusive access to smart money club. capital markets gearry could min ski is live at tiger 21. an exclusive club made up rough live 200 members. managing in total about $18 million in total assets. gary, wish i was where you are. but let's talk about what the smart money is doing. smart money didn't get that way by doing what everybody sells doing. they do it by doing what is uncomfortable at the home and what would be uncomfortable today, would be to be skeptical and selling into this rally. what are they saying? >> and tyler, they are doing exact lit opposite. it is not going to be a surprise people what they are doing is holding their nose and buying more stocks here now and the reason is simple. the major focus of the super wealthy is the fear of inflation which they know is going to come down the road given what central banks around the world are doing. so if you try to protect yourself which is what this
1:10pm
group is trying to do in terms of purchasing power and inflation, by stocks and by gold. >> and shun bonds and other fixed income assets, right? >> well, samsung was here yesterday. he said, can i guarantee you death, taxes and if you buy a bond today, you are going lose money a year from today. >> so he's moving out of that and into equities. equities as an inflation play, right? >> again, you have to look forward productive assets, either assets like kyle bass would have told us earlier on the network, tyler, that are producing cash flow. that you can take advantage of credit markets. but more simple, just again for the general viewers, you may think the stock market is up, you may feel like you missed it for the last three years when you could have bought at the bottom. the truth of the matter is it doesn't matter. you have to think about what is ahead and if you think about what is ahead, equities is a place to hold your nose and just
1:11pm
buy. that's the message here. >> can't be -- can't be any clearer than that. gary, thank you very much. >> you got it. >> sue? >> they pushed the dow past the 14,000 mark for the first time in five years. but how does exxonmobil and chevron, two down energy stocks, and what is their impact on the move. josh lipton is with us. hi, josh. >> each sector has had a different role in the push it 14,000. first up, exxon which beat expectations on the bottom line on strong results and its chemical and refining businesses. but the oil giant also told us that it produced less oil and gas than it said it would back in march. stock right now, basically flat but since the peak in 2 thu 7, energy giant is actually down about 3% of the 880-something point we tacked on in 2013. exxon only contributed 26
1:12pm
points. then chevron, better than expected fourth quarter earnings as its refining business boosted profits. stock right now showing modest gains. but a better long-term story here. chevron is actually up about 24% since october 2007 and has added 60 points to this year's surge. worth noting, the role of the energy sector has also played in this broader rally between 2009 and 2013. energy lagged one of the reasons for nervousness last year, investors anticipate a big correction in the price of oil that never happened. this year, a different story. the energy sector in the s&p is up about 8% and one of the top performers. it's familiar territory for the energy sector. remember in the four years leading to the market high of 2007, energy posted triple digit gains. outperforming the second best sector by 99%. tyler? back to you. >> all right, thank you very much, josh.
1:13pm
unemployment rate may be stubbornly high but that doesn't stop people from buying automobiles. phil lebeau. phil? >> autos much stronger than people were expecting. how strong and who led the way? we will have those numbers when "power lunch" returns.
1:14pm
1:15pm
welcome back it "power
1:16pm
lunch." rick santelli here on the nyse floor. after the data, especially the 8:30 data, we saw a good deal of buys. revisions were positive as was subsequent data. but the selling pressure and number of shorts might have just reversed it. there is a weekend coming. let's open the charts up to two-year charts. fascinating. you think we're going to stay around 2% for while. it augusters like we pl and same can be said for the previous year in 11. look for them to converge and spend around 2%. let's go to the foreign exchange market. if you look at the euro/yen, and a three-year chart, we are only a couple of months of making a record on a three-year chart because we have highs in favor of the euro. let's swap that out for the
1:17pm
dollar/yen. even though it is only about 31-no record since we have seen the dollar at these levels, no matter if you put a variety currencies in, they all seem to be continuing it have fun at the expense of the yen. or vice versa. let's think about it from the export side of the japanese equation, maybe they are getting the last laugh. tyler, back to you. >> rick santelli, thank you very much. forget december to remember. auto sales for january were off the charts hitting five-year highs. so what is fuelling the demand? cnbc's phil lebeaeu with us. >> people feeling they have gelt back out into the market. an increase of 2.4%. other auto makers, take a look at these numberes. couple of these stand out. in particular, toyota. increase of 26.7%. much stronger than expected. increase of 18% expected and
1:18pm
porche, best january ever. as for general motors, increase of truck sales, 32% in january. that is the good news. slight sli troubling, inventory for pick-ups grew to 117 days, up 37 days compared to a month ago. still the company believes it is in the right position in terms of inventory levels. >> we saw some very good data on small business owners. those owners that buy, you know, one to four trucks. we saw some real good growth in pick-up sales there. so we are very comfortable where we are currently. >> chrysler is another one we want to point out here. january sales, more than double compared to what they were in january. three years ago, that shows you how far auto sales rebounded. and finally take a look at shares of toyota. these are the highest level we have seen since june of 2008. any way you look at it, sue, across the board, auto makers are all reporting strong sales and very optimistic tone on the
1:19pm
conference calls. >> yeah, a good story for them, certainly. phil, thank you very much. all right, let's recap the other big headlines describing today's upside session. merck with better than expected fourth quarter earnings. the stock is down because the company's profit at low end. expectations. seeking approval for osteoporosis treatment. mattel on weak demand for barbie doll and movie-themed toys. hasbro has short term fall. ceo will be on "power lunch" next friday. the animal health unit of pfizer, the stock is soaring after being priced at $26 a share. that's above the expected 22 to $25 range. ty? >> sue, thank you. worried about the ever expanding u.s. budget. then stick around. when we come back, an exclusive interview with the fix the debt
1:20pm
co-chairs. john harwood is sitting down with the two at the conference in san diego. meanwhile, as we head out, take a look at wal-mart shares, since the dow peaks back in october of '07. there you see it. this is $100,000. we asked total strangers to watch it for us. thank you so much. i appreciate it. i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money? if your bank takes more money than a stranger, you need an ally. ally bank. your money needs an ally. [ dog barks ] ♪ ♪
1:21pm
[ male announcer ] something powerful is coming. ♪ see it on february 3rd. ♪ all stations come over to mithis is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers.
1:22pm
it is one of the biggest meetings of advisors.
1:23pm
our john harwood is live in san diego there with a big interview with the co-founders of the campaign to fix the debt. alan simpson and erskine bowles. john, over to you. >> thankses, sue. we have alan simpson and erskine bowles. let me start by asking you about some news that that's happened today. the economy adding 157,000 jobs in the month of january. upward revisions for november and december and the stock market has been fluctuating up and above 14,000. what do those two facts tell you, if anything, about the state of our economy and what we need in terms of deficit reduction? >> in my opinion, i was much more infused about the revisions to last month. but in and the month before that. i think we are seeing the economy buffer along at about a 2% growth rate. i think to really get the economy moving again, we have to have a long term plan to fix
1:24pm
this fiscal problem we have. i think that will restore confidence, you know, if you look at consumer confidence, it is still pretty far down. i think we got to see a plan that will fix our long-term deficit problem. we do that, i think we could have really great growth. >> senator, if the dow sets a new record, it was in october of 2007, that it was last at levels of this kind, what does that tell you? >> not much. i have messed around, true layman, in the great fields of finance. but i can tell you one thing, if you just want to be thrilled by quarter to quarter stuff, that isn't going to do anything for this country. you ought to start thinking decade by decade. because the math is impossible to miss. so the dow, i always loved it that there would be a rise in the dow and they say what caused that? because the super bowl or president's election happened on -- that's like reading pigeon
1:25pm
droppings on the edge of the dirksen building. this is irrational exuberance still. >> we will stop rating pigeon droppings. >> okay. >> and let's go to your deficit reduction. we have seen in slow motion, almost 2 ppt 5 trillion through discretionary cuts and through the fiscal cliff deal. how much more revenue -- or how much more savings do we need and is president obama correct to say that tax revenue needs to be part of that solution? >> i would say we are half way there. unfortunately, we have done easy stuff. we raised taxes on rich people and we've capped discretionary send itting without saying exactly what we would cut. we haven't done anything to reform a tax code. we haven't done anything to reform our entitlement programs. to slow overrate of growth of the economy. we have to do that or we will never get to the promise land. i think president obama is
1:26pm
right. that we still got to have some revenue in the mix. but again, the real focus has to be on reducing these entitlement costs. that's the big deal. >> senator, you agree that we need entitlement cuts but we also need revenue as part of the last phase of this deficit reduction? >> i do, indeed. you don't have to call it a tax increase. if you go into the tax expenditures, which are these loop holes, they are really spending any other name, earmarked, $1,100,000,000 of them. you can't spend your way out of this hole and can't tax your way out of this hole or grow your way out of hole. no economy said we could grow our way out in year. >> we are hearing more and more from republicans and even some democrats that, as they say this march 1 sequester deadline that maybe we let the sequester take
1:27pm
effect. 10 million over ten years, evenly split between domestic and defense or nondefense and defense. would that be such a bad thing or should financial markets and others watching this program say, that's okay. we can take those cuts. >> it is not so much a bad thing, it is a stupid thing. what they sr mindless senseless akos the board guts in areas we don't have to focus on right now. what we need to focus on are the entitlement programs on the cut side. and besides, no business guy watching this show ever balances their budget by making across the board cuts. they go in and make cuts where you least adverse effect on productivity. that's what we are not doing. we are just doing stupid easy stuff. >> senator, on entitlements, what exactly do you want to see done? people -- mitt romney ran your party's nominee last year, ran saying we need to shift to a system where we pay per person.
1:28pm
obama called it a voucher. are there other things we should do? >> i tell you, 18 years in the senate, we tried desperately to do something with healthcare. we had a good bipartisan group. we met once a week. and the reality is, your congress people don't understand the situation. nobody understands the situation. so they have done this piecemeal stuff 37 we said, look, you can't let it go over 1% of gdp. can you go in there and find fat but no one will ever say that or you get ripped to shreds by the aarp and senior groups and everybody else. we were specific in what we said, about 400 billion -- trillion. 400 trillion we hammered around in there. all you have to know is that regardless of what you call it,
1:29pm
it can't possibly work because you've got it take care of 3-year-old of the preexisting condition that may live to be 60. have you one person in america that weighs more than the other two. you have diabetes a and b. penn people doing drugs, boods and tobacco and aren't going into a wellness program. ten million a day turning 65. you have to have tort reform. try that one on an old trial lawyer. got to do something with docs, providers, hospitals. keep one set of books instead of two and for heaven stakes stick it to the guy who can get it by this building, gets heart operation for 200 grand and doesn't even get a bill. who is kidding who? can't work. >> we begin the year with a big threat that debt limit would not get raised and we would be in the soup. that been kicked for three months down the road. is that threat over? >> no. that threat is not over. look, messing around with the debt limb sit like crazy. why would you ever want it mess around with the full faith and credit of the u.s. there are lots of better ways to do it.
1:30pm
even having the sequester and continuing the resolution which lead it a shut down of government. as bad as those are. those aren't as bad as messing around with the debt limit. that's foolish. >> we will take a pause right now. we will go to break. when we come back, we will talk about whether there is sign of change. "power lunch" be right back. may not be with fidelity, but we can still help you see your big picture. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. omnipotent of opportunity. you know how to mix business... with business. and you...rent from national.
1:31pm
because only national lets you choose any car in the aisle. and go. you can even take a full-size or above. and still pay the mid-size price. i could get used to this. [ male announcer ] yes, you could business pro. yes, you could. go national. go like a pro. that if you pick three people, odds are they'll approach everything in their own unique way -- including investing. so we help clients identify and prioritize their life goals. taking that input and directly matching assets and risk preferences against them. the result? a fully customized plan. we call it goals driven investing. you have unique goals. how about a portfolio specifically designed to achieve them? ♪ expertise matters. find it at northern trust.
1:32pm
1:33pm
all right, moving up above the 14,000 mark once again with the dow jones up 144 points at 14,006. as for the s&p, it's been a strong session for the s&p as well and a very strong month for the s&p. with the s&p now up 1%, 15 points at 1513.45. let's go back to john harwood now. he is with alan simpson and erskine bowles. john, back to you. >> thank you, sue. let's get to the end of 2013. i want it ask each of you how you grade your party on what you have seen in early parts of 2013. president obama has had a more
1:34pm
confident tone than little confrontational with his inaugural address with republicans. he picked people very close to him. jack lewis, treasury secretary, another insider. what do those moves tell you and what does the rhetoric tell you about where he is going in the second term and dwhae wants is and whether he is able to make deals with republicans. >> i think the president picked people he is comfortable with. he knows well, that trusts, that he believes in. i know jack really well and i think he will do a fine job. >> you like that choice? >> yeah. i know jack and i know him really well and i think he will do a fine job. matthews was my deputy chief of staff. they is extraordinary. and dennis, the president had a long relationship with. i he picked people he is comfortable with. i think he knows what he want to do. he is prepared it negotiate with republicans. >> you don't see too many elbowes from him early.
1:35pm
>> i think both sides have to move out of their comfort zone. i think the president has to go further than he's began. people don't realize he put 350 million worth of healthcare cuts on the table. that's not enough to slow the rate of growth to the economy, but it is a good start and republicans will have to make some concessions in order to make this thing moving. >> ten senator, what do you see from your house, a lot of people were surprised this were willing to put the debt limit off. do you see a different attitude there or more controlled by john barn over his caucus? >> i have seen it more common since leaking through the icebergs of my party who are rigid. i say some of them are rigid as a fire place poker but without the occasional warmth. and these guys are tough and they are going to cause trouble. but when i saw the candor set up
1:36pm
a film or graphic of what would happen if they decided to take their stand with the debt limit, he said, this was disaster. and the only way can you describe disaster for those guys is you're going to get beat and be embarrassed and they will make you look like fools. i think that is coming around. i would say, drop the social issues. i thought this party was government out of your life, right of privacy and right to be left alone and yet this mess around and all these social issues. that is messing around. so i think that they realize and boehner certainly realizes that good people of good stable republicans of any stripe remember that you don't want to be known as the closed down the government. >> let me ask you about two people that we talked about in the td ameritrade session earlier. you've got tax reform on the table. and you've got deficit reduction and the need for bipartisan
1:37pm
compromise on the table. what does it mean to that process that max and mitch are both up for reelection in 2014? >> it may be inside baseball but o boy oh, boy it makes it a lot tougher. really tough. max came in when i did. 78. and here he is, chairman of that finance committee and he is up for reelection. he was on our commission. felt limited i think in some ways. he was on the super commission. they did nothing. that failed. now he's got to come out and take on everybody in that huge pile of tax expenditures. realtors, life insurance -- he is headed for -- it will take a lot more than two years and especially in a reelection year. now mcconnell in reelection year. >> potential primary for mitch mcconnell? >> i think scenarios are set for anybody that violate the mantra or whatever the great issue is. the great base, whatever the
1:38pm
base is. but if you get out there and mess around with that, they will pick you up in the primary. >> let me ask you sort of a bigger picture question. do you think you -- we've had several months now in which people like you guys have been out across the country campaigning for this issue raising the profile. and we talked about the incremental progress that's been made. do you look at this issue and say, we're getting there. we're making progress. things are turning or are you still fund manically pessimistic about the abiflt system in washington to do what needs to be done. >> no, i know it can be done. i negotiated the balanced budget between clint yoen and gingrich. what they both need to do is put the partisanship aside. put the country first. get out of the country zone. get in a room and describe, democrat have to do more of entitlement programs. for republicans, have to take a small portion of whatever we do in tax reform which we badly
1:39pm
need to be globally competitive and to reduce the debt. if they do that, we will get a deal and i will keep fighting for it. i think our generation messed this up taen is our responsibility to clean it up. >> sue, go ahead. i want it follow up on what you just asked, john, if i could. and ask mr. simtonson something similar. traders on the floor have been listening to this interview and i have to tell you is the reaction that they've given me is basically they don't have any confidence in washington any more. they don't think washington can get it done. do you think it'll take a grand bargain to restore the confidence of the market in washington? or do you think that basically, we can do less than a grand bargain to rerestore the confidence. right now these guys down here don't have any confidence in washington at all. >> no. but then you see the american people are wondering why they don't have any confidence if you are seeing things like this, exuberance in the markets, when you know you are teal dealing
1:40pm
with a dysfunctional conference. those are the divisions that are going to chop this country up. i can tell you tell you, i don't know if they will reach a grand bargain or not, we never felt like the messiahs. i'm not disappointed. if they can move incrementally, i think there's great. we didn't hurt the little guy. didn't do anything with food stamp answers ssi. we tried to be sensitive but but if you can't go in and deal with entitlements and social security and defense, which is the minor part of the there, you're not going to get anywhere. so grand bargain, small bargain, no bargain -- o go big or go home, in my mind. >> senator, one more before we wrap it up. off the news. chuck hagel got roughed up in his hearing for senate secretary yesterday. will he be confirmed and what is your valuation of the pick? >> he will be confirmed.
1:41pm
he was interviewed by another maverick. john mccain. if john mccain were in the witness chair would he get the same barrage from the republicans. so there are a couple of of old fighters. they will do well and i think that hagel will do very well. >> you like the pick? >> oh, yeah, i do indeed. i do. of course, leon, the supreme to me. i've known him for 40 years. but no, he will do well. and if there is any place you need to start messing around that doesn't have a thing to do with the forstructure, don't let anybody tell you, if we do stuff, we are expecting. admiral mullen was correct. saying the greatest thing isn't terrorism. it is the debt. can you go into the try care system. can you go into the contractors and defense flag officer. making 2300 bucks an hour. go look at contractors. go into the dod school system where it is costing $51,000 a
1:42pm
year to educate student who are just a bus ride away from a public school. this is nuts. >> you just heard from alan simpson. chuck hagel will be confirmed and he will be helpful in cutting defense spending. >> i could listen to those guys and you, john, all avenue. thank you to mr. bowls and senator simpson. sue is here along with senior economic reporter steve liesman. i meant that sincerely. i could listen to them and the common sense all day. >> so refreshing. >> steve? >> you know, i think steve's -- >> i think steve -- >> yeah. >> his microphone. >> you know, ty, i think that common senz approach, certainly down here, that's what they want to hear. they want somebody to drive congress to make decisions but they are not confident at all that we will get the type of decisions that longer trm will be healthy for the country.
1:43pm
there is so much skepticism. so i find it very refreshing when you have the two gentlemen saying, listen, this is crazy. we have to get everybody together. reach across the aisle and reach some sort of agreement on the key issues. >> and figure out something regarding entitlements. that is where the big money is. it is there, in defense and those are the two real honey pots that have to be addressed one way or another and mr. simpson could be cluded this. you can actually cut defense spending in sensible ways that do not compromise the nation's ability to defend itself and to execute on national interest. we've got steve liesman's microphone fixed. >> i think there is cold water for market optimist there. the comment that stood out to me is bowles say be, we have done the stupid easy stuff. that's pretty much a direct quote. so by what happened in december,
1:44pm
that was a deal, his point is there is still a lot of work to do and the hard political stuff remains to be done. the entitlements as you suggested, defense as you suggested. then folding in what alan simpson said i thought was interesting. that 2 will take more revenue and he suggested in terms of tax expenditures an tax deductions as well as spening cuts. it seems like both were more in the -- we need more spending cuts now at camp. but we have to get both parties to give m. i don't know about you guys but i dent see either party giving a whole lot here. >> an whole lot. >> but hopefully something. >> see, we will be back with you in a minute. when we daum back, today's big rally, stiting above, right now, above 14,000 for the first time in more than five years. there's a history. [ male announcer ] at his current pace,
1:45pm
1:46pm
bob will retire when he's 153, which would be fine if bob were a vampire. but he's not. ♪ he's an architect with two kids and a mortgage. luckily, he found someone who gave him a fresh perspective on his portfolio. and with some planning and effort, hopefully bob can retire at a more appropriate age. it's not rocket science. it's just common sense. from td ameritrade.
1:47pm
in today's yahoo! finance question of the day, we ask with gas prices on the rise, how is it affecting your spending? 51% of you say you are cutting back on discretionary items. 5140% say spending about the same. and 9% say i'm spending more. >> kind of sad, only 9%. coming up at the top of the show, what does dow 14,000 mean for you? is it more than just a number? are the ingredients in place to keep us pushing beyond 14,000? we have some of the smartest minds on the job? and if you don't feel like you are joining in on the party, you're not alone. we have expert robert frank to tell us why we are hitting that 14,000 number. and we have two stocks. one is s&p's worst performers.
1:48pm
the other is the best. sue, see you at the top of the hour. >> thanks, mandy. at 14,000 again. let's get bob pisani, joining me from the floor of the nyse. this market is able to reach new heights. >> not to mention, fairly tepid report. that may be a bit of a factor here. we hit 14,000 very early this morning and for the most part we are right there and have been remaining right there. good volume today. remember first trading day of the month that normally get good volume. 5-1 advanced deing spots. i just want to show you new highs here approaching when you start getting close to 400 new highs on the new york stock exchange. that's a pretty significant number. new lows only 9 here. in terms of sectors, there's wur big groups here. technologies and financials, all of them up better than 1%. you want it know how much this market want to go up?
1:49pm
i wash inger sol rand carefully. they are involved in a lot of different industries, different areas. they are good numbers but guidance was very tepid. revenue guidance wasn't that great for 2013. stock is up, sue, at a new high. ceo came out this morning and said we expect to be a slow growth economy in 2013. hardly a bullish comment. very typical of some of the cautious comments we've seen, sue. yet that stock is at a new high. very successful ipo and we spent the morning with them on the street. and helping pets with vaccinations, live stock is well. and we are talking now, $26. price top is 22 to 25. went public at 26. opening and -- >> at 20% throughout the day. >> great story and they brought their family. just a great morning. >> yeah it was. a nice morning down here.
1:50pm
thanks, bob. appreciate it. >> we are above the 14,000 mark on the dow. let's get a check on the nasdaq and what the next level investors should be watching over there. seema mody is there with that detail for us. >> hi, sue. we have a look at technicals. that's what traders are watching. and analyst are telling me that if the composite can cross 3200, key resistance level, we could see a break out in the index. in terms of market mile stones though, nasdaq has a long way to go. composite is about 37% away from its intraday high that it hit back in march of 2000, around the tech bubble. we still got a ways to go. nasdaq holding on to 1% gain and once again, apple not contributing to the rally. report this morning from npd. highlight apple's dominate role. google hit its all-time high of 774. traders saying we are continuing to see this rotation of capitol out of apple and into names like
1:51pm
go google. take a look at dell. david faber reporting that a deal is on track for next week. netflix continuing its ride higher. semi conductor stocks once again out performing applied materials, leading the pack higher. back to you. >> thanks, seema. and the stock market isn't the only market that that's reallying today. we have seen big moves on gold. sharon epperson fills us in at the nymax. >> oil and equities have been highly correlated. much more so than in 2007. the last time the dow hit 14,000, that's part of the factor that is contributing to the gains we are seeing here in the oil complex. but we have seen an even greater gain. up more than a dollar in this session and of course the blast at u.s. embassy in turkey, that is a factor that raising the
1:52pm
tensions and chris many premium in the marketplace. add it that explosion at head quarters in mexico city, that's another factor that traders are launching. we haven't seen significant gains in the u.s. oil price because we have pipeline concerns that pipeline taking crews from oklahoma to texas coast. that probably won't be a full capacity until the fourth quarter. that is something that leaves still that glut of oil in the middle part of the country that is something that kept a lid on the rise in the u.s. oil price. in terms of precious metals, it has been a strong day for precious metals after the jobs data and that unploemt rate is what traders are watching. one reason they think precious metals. >> so what has happened to the individual investor over that time? jane wells is in los angeles. jane? >> hi, tyler. you think of americans as being resilient and optimistic. we found more than a few who said they survived the last few
1:53pm
years by thinking of warren buffett. the view from main street when we come back. [ male announcer ] with citibank it's easy for jay
1:54pm
to deposit checks from anywhere. [ wind howling ] easier than actually going to the bank. mobile check deposit. easier banking. standard at citibank.
1:55pm
okay. [ male announcer ] with citibank's popmoney, dan can easily send money by email right from his citibank account. nice job ben. [ male announcer ] next up, the gutters. citibank popmoney. easier banking. standard at citibank. we have dow wsh 14,000. there, you see the all-time high of 14,164 and change today.
1:56pm
right now, up to the second at 14,013. a rise on this day of employment report out of washington that certainly is addings fuel to already hot market. so what is the roller coaster of the last -- has the roller coaster of lat five years been like for individual investors people who may trade on their own or have retirements tied up in 401(k) ks, mutual fund and ets. jane? >> tyler, our small investors back and did they ever cash out. in 1999, 58% of americans owned stock says gallup. that rose to 65% by the 2007 peak. now well etrade says trading volume in january is up 17% from december. td ameritrade and schwab both recording asset gathering in the end of 2012. on main street, a lot of people
1:57pm
say they never really left the market, they just didn't trade it. >> in 2007, i never got out. >> i got out of the at the right time. but a a bunch of cds. >> i bought stock options when i got out of company and i'm kblad i did because they are just doing gang busters. >> i do the warren buffett thing. you guy stock, hang on to it. it is like family. >> i bought stock. see it going up. i'm very pleased. >> it is not for the short haul. got to stay with it. >> last year have been pretty good. >> in 2007, 50% of those surveyed said they owned at least some stocks, almost evenly split between equities totaling under 50,000 and over clr 50,000. five years later, 51% said they owned stock. that's been pretty steady. wefr basically back to 20 pow 7. however a greater number of people own equities worth more
1:58pm
than $50,000. sue, as she said, you hold on to them. they are like family. >> they are like family, indeed. thanks jn jane. up, up and away here on the street. we are in solid green. more when we come back.
1:59pm